Watershed moment

A former California timber town
becomes ground zero in the battle over bottled water

click to enlarge

Nestle Representative. Dave Palais speaks to a small group at the site of a planned bottled water plant in McCloud, California. Photo by Lucas Mobley.

By Christina Ammon

High Country News

McCLOUD, CALIFORNIA – It’s already late morning, but the wide
streets are empty. Patty Ballard pulls her ’88 Chevy van into the parking lot
of the Shasta Sunset Dinner Train, where she lugs bus tubs for a scant living.
Back in the days when McCloud was a booming timber town, the train was laden
with logs. Now it’s a mainstay of the local tourism economy, winding diners
around the flanks of Northern California’s imposing Mount Shasta.

When the ailing timber industry toppled in 2002, McCloud turned
to tourism. But the economic statistics remain as bleak as an empty sawmill:
Since the 1960s timber heyday, the town’s population has dropped by half. Per
capita income is less than $16,000. Last year, the graduating class at McCloud
High School totaled one. Despite the hopeful sheen of espresso shops and bed
and breakfasts, McCloud sometimes feels like an emptied-out museum. But things
could be different.

In September 2003, the unincorporated town’s governing body —
the McCloud Community Service District — signed a contract with Nestlé Corp.
allowing it to build a million-square-foot plant and bottle up to a half-billion
gallons of local spring water per year for its Arrowhead brand. The plant,
which would sit on the old mill site, would employ 240 people, and Nestlé’s
fees and payments of $300,000 per year would increase the town’s operating
budget by one-third.

In a place where water is so abundant that residents hose their
driveways in winter to melt snow and ice, cashing in on what was going to waste
seemed like getting something for nothing. Ballard was enthusiastic: “I’ll be
first in line for a job,” she said.

But four years later, Ballard still works on the dinner train,
and the bottling plant remains no more than a blueprint. Soon after the
contract was signed, a group of local citizens questioned the plant’s potential
effects on their community — its water supply, its quiet character and its
world-class fishing streams. And they were outraged at the terms of the
contract, which bound them for the next 100 years. The group won a lawsuit in
Siskiyou County Court, and the contract was nullified because it was signed
prior to the completion of an environmental review and therefore violated the
California Environmental Quality Act. But Nestlé appealed, and won. In May, the
California Supreme Court refused to hear the case. But the controversy refuses
to die. Now the opponents are attacking the proposal from other fronts. And
this little town in Northern California, still traumatized by the timber
squabbles of the past, has become the opening battleground in a West-wide war
over bottled water.

Americans drink more than 8 billion gallons
of bottled water every year, spending more than $11
billion annually on Dasani, Aquafina, Evian and other brands. With a growth
rate of 10 percent per year, bottled water is the fastest-growing segment of
the beverage industry, surpassing milk and likely to outpace soda in the near
future. Bottling plants are popping up everywhere, many in rural areas that
boast of pristine spring water.

Though often heralded as a clean industry, water bottlers have
not been welcomed in some communities. In Mecosta, Mich., citizens won a
lawsuit against Nestlé after proving its operations harmed nearby streams and
wetlands. Similar battles have erupted in Florida, Texas and Maine. Activists
routinely attack the industry as a whole because of its contribution to
landfill overflow and because it commercializes what many see as an essential
human right. Still, the fight has been slow to ignite in the West, where
communities, often reeling from the loss of one extractive industry or another,
have generally welcomed the economic promise of bottlers with wide-open arms.

California is now home to more water-bottling facilities than
any other state in the nation. Some suck water directly out of springs; others
filter the municipal water supply. Nestlé alone has plants scattered from
Calistoga, in Napa County, to the Morongo Indian Reservation on the fringes of
Los Angeles. In the northern part of the state, Crystal Geyser, Mt. Shasta
Spring Water and Dannon are already in operation.

So, when Nestlé’s natural resource manager Dave Palais first
arrived in McCloud four years ago, the stage seemed set. His affable nature and
casual dress went over well with locals. But when the five-member district
board unanimously signed the contract without public review, the love affair
abruptly ended. The town was split down the middle like firewood.

Though bottling was nothing new
to Northern California, a confluence of factors had merged in McCloud
to galvanize opposition to the Arrowhead plant. In addition to the sheer size
of the facility and length of the contract, McCloud is the gateway to Mount
Shasta and to celebrated fishing streams, making it a charismatic destination
for tourists along the I-5 corridor. Over time, many of its blue-collar
residents have been replaced by urbanites attracted to the scenery and the
prospect of a quieter and cleaner life. Janet Connaughton, who moved here from
Marin, fits that profile. She’s in shock over the contract.

“How did two loggers, two housewives, and a retired insurance
salesman get to sell water that belongs to us all?” Connaughton asks, referring
to the service district board. She runs a small bookstore, knits in her spare
time, and enjoys the town with its mild-mannered residents who wave to each
other in passing. Though her first impulse was to flee to a new town, she
resisted, and has instead become the leader of the local opposition.

She and her allies are haunted by the thought of a massive
facility sitting on the town’s historic mill site, its fluorescent glow
intruding on McCloud’s starry nights, and an endless barrage of delivery trucks
devastating the mountain silence. Worse, she wonders what the water mining will
do to the water table. Nestlé would withdraw 1,600 acre-feet of spring water
per year, an amount about equal to the town’s yearly use. Measurements over the
past two years indicate that there’s plenty of water to go around — at least
9,000 acre-feet per year flow from the spring. But Steve Bachmann, a local
Forest Service hydrologist, says that the unique volcanic hydrology of Mount
Shasta, with its lava tubes and springs that can appear and disappear from one
year to the next, is poorly understood. No one really knows what effect a
severe drought or global warming might have, he says. This uncertainty has drawn
California Trout and Trout Unlimited into the fray; the springs feed an
important tributary to the McCloud River, a renowned fishing stream and the
mainstay of the local tourism economy.

Though the contract requires that Nestlé be treated like any
other member of the water district, paying the same rate and subject to the
same cutbacks in times of drought, the terms are unsettling. Nestlé can draw up
to 1,800,000 gallons of water every day at a cost of just 8 cents for 1,000
gallons. That’s 8 cents for enough water to fill 3,780 Arrowhead 1-liter
bottles, each of which can sell for $1.50 or more down at the local convenience
store. It’s potentially a huge profit margin, though Palais won’t release an
exact figure; it’s protected, he says, “like the Coke formula.” And, for the
next 100 years, as the value of water inevitably rises, McCloud will have no
chance to look for a better deal: Nestlé’s contract forbids the town from
selling water to any potential competitors.

For environmental groups campaigning against bottled water,
McCloud makes the perfect poster child. Poised at the headwaters of the
Sacramento River, the area sits at a critical juncture for California’s water
supply. “Mount Shasta is a symbol of Northern California,” says Ruth Caplan,
organizer of the Sierra Club’s Water Privatization Task Force, which fights
corporate control of water. The organization uses McCloud as a cautionary tale:
Communities should take a closer look at water bottling, activists say, and
pass ordinances preventing the bulk export of surface and groundwater. “This is
just the beginning,” says Caplan. For her, the war is not over until all
communities are granted democratic control of their water.

Still at work on the dinner train,
Patty Ballard is worried more about paying the rent
for her subsidized apartment and raising her son than about drying wetlands and
global warming. “It’s like worrying about Armageddon. I don’t want to think
about it. You’ve got all this stuff going through your brain. Is there going to
be a big flood? Is the volcano going to blow?” She characterizes the plant’s
opponents as urban refugees who want McCloud to be a meditative retreat. Her
friend, Sheri Burris, agrees: “McCloud wasn’t meant to be quiet.” Burris has
deep roots here; her father worked as the head oiler for the mill powerhouse
back when McCloud was a timber town. The big wheel that turned the generator
sits inert on the lawn behind the town’s timber museum.

The two friends have formed the McCloud Grassroots Committee;
they host meetings with Nestlé supporters that fill Burris’ house. They’ll
agree that the contract with Nestlé is a bit long. They’ll admit to some fear
of big corporations. But the bottled water is just too good an opportunity to
pass up. Burris fears that without it, the town she grew up in will die.

But the opposition won’t go away either, despite the recent
blow from the state Supreme Court. Opponents have attacked the draft
environmental review, which doesn’t address impacts on fish and aquatic life
and leaves a number of other questions unanswered. The county is expected to
either hand down a final review and decision, or start the review process over
this summer. In the meantime, the “antis” plan to keep fighting, here and
elsewhere. They see McCloud as a precedent-setting case that could affect
watersheds across the West. “There is nowhere to run,” says Connaughton. “This
battle is going to be everywhere.”

The author writes from Ashland, Oregon, where citizens just
rejected a city charter revision that contained loopholes allowing for the sale
of water for bottling from Ashland Creek.

This article was first published in High Country News. It
was made possible with support from the William C. Kenney Watershed Protection
Foundation and the Jay Kenney Foundation.